Car Insurance Guides

When it comes to car insurance, young drivers need all the help they can get and some companies are suggesting they adopt a disciplined approach to their motoring.

The backdrop is a recognition that the costs for young drivers car insurance could be about to rocket, as new personal injury laws are introduced. These new laws, brought about because of the change in the Ogden rate which calculates how much victims get following a lifelong injury, could mean a £1,200 hike for some young drivers.

So, to help youngsters prepare for the worse, a number of advice tips are doing the rounds at the moment and the key points are highlighted below:

Downsize the car

Not always easy to do admittedly, but it makes sense that if you have an expensive car, or one that is considered sporty, or has been modified in some way, then your premiums will be higher. Drivers often need to be remined that car insurance is based on how much the car costs to replace should it be damaged, or stolen. Generally, the older the car and the smaller in terms of body and engine size, the cheaper it will cost to put right.

Up the security

It’s amazing how many people will spend money on making their car look better, yet forget basics such as security. Make it harder for it to be stolen and this could merit a discount from the car insurance company.

The black box trend

Some regard it as a spy in the car and it does track your driving style, telling the provider of the black box – the insurance company – your driving style and how many miles you are covering. Behave yourself and having this on board could save you up to 20% on your premium.

The sober parent

Name a parent on your policy and the car insurance company could view it as a good thing, because the parent might be using it occasionally and should be a more experienced and careful driver.

Shop around

There are so many companies providing car insurance policies, that getting the right coverage is far easier than before, but you have to be patient and shop around. And you have to create a policy that suits you and one that could save you some money.

A major car insurance scam in the Midlands has been broken up by police.

Four men from Birmingham were at the core of a car insurance scam. One of the group acted as a broker for other people trying to get car insurance. He was able to secure cheap deals for his ‘clients’ not because of any professional arrangements, but because he lied on application forms, then charged a ‘brokerage’ fee of up to £500. And because of the lies and falsehoods, the car insurance policies taken out by his clients were invalid and the people were not covered.

The method behind the scam was simple. He simply changed his clients’ details in order to get cheaper quotes and arrangements. This would usually involve a change of address, birth dates and details behind previous claims.

The fraud was detected by police when the insurance company picked up on the fact that multiple claims were being made from one single internet address. What’s more, when police checked an address for a number of the policies, they were made using a cottage in the south of the country whose owners had no idea their address was being used in such a way.

Police raided the homes of the perpetrators of the scam and discovered details of the fraud on mobile phones and computers.

The head of the gang was given a jail sentence, but it was suspended and the other members were ordered to pay costs as well complete set hours of unpaid work.

Representatives of the car insurance lamented the way in which innocent people had been hood-winked by the gang, but pointed out it was the responsibility of the person buying a policy to check that it is valid and that the details are correct. Car insurance companies would not cover claims for polices that might have been taken out in good faith, but were bogus.

A case reported by a driver in a national newspaper has raised a little known consequence of making a non-fault car insurance claim.

Data from big insurers suggests that shortly after a driver makes a non-fault claim (one that is not their fault and the other driver is found to be at blame), then they are more likely to be involved in an accident in which they are to blame and that they will have to make a claim to cover their liability and cost of repairs.

This might sound slightly bizarre to most, but it’s a consequence of how car companies will securitize big data and make their decision based on the statistical outcome of a future event.

The driver in this case was parked normally, but was hit by another car. He made a successful non-fault claim and his car was repaired. When he came to arrange his next year’s cover with his insurance company, he was told that his premium had doubled for the year. When he objected, his insurance company wrote to him and pointed out the statistical likelihood of having an at faulty claim shortly after his non-fault claim was high. Therefore, they said there was nothing they could do.

The man objected again, the quote was lowered (after the intervention of the newspaper), but still represented a 50% rise and the insurance company said that there was nothing more they could do. The man decided to go elsewhere for his cover.

It’s a salutary tale for drivers seeking to renew their car insurance cover, as it does show the increasing reliance companies have on big data and how they base their prices on statics and likely outcomes, rather than just taking into account the driver’s own record.

Industry observers believe this will happen more and more over the coming years.

A recent research report reveals that parents are defrauding car companies by lying for their children.

The practice, known as car insurance fronting, involves parents falsely claiming that they are the main drivers of their children’s cars.

By doing this, the offspring can save hundreds of pounds on their car insurance bill.

The figures, from the Co-Operative Insurance company, discovered that over 100,000 parents were involved in fronting. Those who were questioned for the survey, on average it was shown that they had been doing it for just over two years and that they had saved around £300.

But, car insurance companies are warning that fronting can prove to be a costly mistake. Should someone be caught, they could find that they are charged higher premiums, or at the other end of the scale, banned from getting insurance altogether.

The report also revealed that the vast majority of those who responded to the survey, actually admitted that they knew that fronting was illegal. However, this did not act as a deterrent and nearly everyone said that they thought, in the case of an accident, they could still make a claim on their insurance.

What’s more, the most common age group for fronting is between 17 and 19, followed by 20 to 22, and 23 to 25. The region’s most prevalent for fronting is the north-east, then Yorkshire and then the south east.

Car insurance companies recommend that if youngsters feel they can’t afford a policy, they should opt for a telematics policy (which monitors their driving style), in order to bring down premiums.

According to a leading motoring organisation, the time of cheap car insurance is coming to an end and significant price rises should be expected.

For three years now car insurance premiums have been falling, but this trend is likely to be reversed with the unexpected rise in insurance premium tax (IPT) which the Government will introduce in November. IPT is rising from 6% to 9.5%. This alone is likely to add a near £20 to the average policy.

Premiums have recently risen 5.5% with the average price for a typical comprehensive motor insurance policy now standing at around £550.

The motoring organisation believes that many car insurance companies have in effect been subsiding premiums so as to maintain their competitive edge. This cannot be sustained though and premiums will likely rise over the coming months.

The industry has been worried for some time that although the cost of car insurance has generally come down, the cost of claims continues to increase. What’s more, personal injury costs are still rising (especially whiplash), at a rate of about 10% a year since 2013.

Young drivers continue to bear the brunt of the price hikes, with those aged between 23 to 29 having to pay just over 6% more, working out at an average of £680. This is far less though than the youngest age bracket, who face an average premium of £1,200. Those living in the north west of England have to pay the most for their insurance, followed by London and Yorkshire. The cheapest area continues to be Scotland.